Libya: Italian oil giant suspends supply from Libya

Italy's largest oil and gas company announced that natural gas supplies from
Libya had been cut off, with the government in Rome warning that it has just
30 days' worth of gas reserves and enough oil to last 90 days.

An Eni gas station worker fills a motorbike tank in Milan. Eni, the main foreign operator in Libya, controls one-third of the north African nation's oil and gas productionPhoto: AP

ENI announced that natural gas supplies had been suspended from the turmoil-hit country. "Certain oil and gas activities in the country have been temporarily suspended as a precaution. Security measures on those facilities have been undertaken," ENI said in a statement.

Italy is Libya's biggest trade partner and imports 25 per cent of its oil and around 10 per cent of its gas from the North African country.

A government source told Reuters that Italy's oil reserves could run out within 90 days and its gas in 30 days.

Ministers played down the seriousness of the problem, saying Italy could switch to other supplies, such as Algeria and Russia.

"It's true we have had reports of reductions in the supply of oil from Libya but the situation should not be cause for concern because we have other sources," said Franco Frattini, the foreign minister.

The turmoil in Libya pushed the price of Brent crude oil to $105.30 (£64.80) a barrel, with analysts warning that the increase could drive up the cost of fuel for British motorists, who are already paying around 128.8p for a litre of unleaded petrol.

Italy is also deeply concerned that the violence in Libya could prompt tens of thousands of refugees to try to reach Italian soil.

Mr Frattini said Rome was worried about the "imminent danger of a civil war in Libya and the exodus of migrants to Italy."

Silvio Berlusconi negotiated a £3 billion agreement in 2008 with Col. Muammar Gaddafi whereby the Libyan coast guard and navy blocked African migrants trying to reach Italy by boat, but if Gaddafi falls then the pact could collapse.

The Italian and Libyan economies are heavily intertwined – while Italy imports oil and gas, the Libyan regime has stakes in a number of high-profile Italian enterprises, including Unicredit, the country's biggest bank, Finmeccanica, a defence and manufacturing company, and Juventus, the football club.

Italy's stance towards the revolt in Libya has been the softest of any major European power. When Silvio Berlusconi, the prime minister, was asked at the weekend whether he had been in touch with his friend Gaddafi, he said: "The situation is still in flux and so I will not allow myself to bother anyone."